I'm trying to figure out a strategy on buying real estate from the seller on payments, adding value and reselling it for profit and thus, paying off the original seller.

My best advice would be to calculate how much you would need to spend on food and determine how that number relates to the amount of rent you are paying.

They pay rent, but there are lots of other problems. 

I pay him money but then he disappears for a week at a time and won’t return my calls.

So our gross monthly income of $5000 - $3093 of EVERYTHING we need to pay each month = around $1900 in net monthly income. 

The loan insurance is in case we dont/cant pay back.

All told, the GP is making $337,500 just to arrange the deal (not including their reimbursement of any out of pocket costs they have already covered: due diligence costs, broker costs if they are paying anyone to bring them deals, legal setup costs, etc).  

What are you paying for these vacation homes ?

All in all my contractor quoted repairs around $2k.Am I able to withhold from the security deposit to pay for repairs?

With interest rates going back to more normal levels (because the last 10 years they were super low) and me getting closer to when I plan on retiring, I am working on paying off my mortgages, so I have fewer expenses and more money coming in from the rentals...or if I want, I can sell them in 5 years without interest penalties.